The International Energy Agency‘s latest forecasts show for the first time that global demand for fossil fuels is peaking.

Under current policies, UNCTAD reports, coal use would decline in the coming years, natural gas demand would stabilize in the late 2020s, and oil demand would peak in the mid-2030s.

If countries keep their climate pledges, demand for fossil fuels would fall even faster.

UNCTAD highlights that this is already reflected in lower investment in fossil fuels: between 2019 and 2022, investment in oil and gas fell 17%, to about half its 2014 level.

One estimate suggests that, to limit global warming to 2°C above pre-industrial levels, a significant proportion of fossil fuel reserves will need to remain unused: one-third of oil reserves, half of natural gas reserves and more than 80% of coal reserves.

In Africa, for example, this comprises 28 billion barrels of oil, 4.4 trillion cubic meters of natural gas and 30 gigatons of coal.

In Central and South America it comprises 63 billion barrels of oil, 5 trillion cubic meters of natural gas and 11 gigatons of coal.

Fossil fuel

According to UNCTAD, even more stranded assets would be needed to reach the 1.5°C target: having a 50% chance of reaching the 1.5°C target by 2050 would leave 58% of oil reserves, 56% of gas reserves and 89% of coal reserves untapped.

PetroChina data indicates that, in the first half of 2023, affected by factors such as supply and demand fundamentals and rising U.S. dollar interest rates, international crude oil prices fluctuated downward.

The average spot price of Brent crude oil was US$79.66 per barrel, down 26.2% from US$107.94 per barrel in the same period last year.

Meanwhile, in the first half of 2023, supply and demand in the international natural gas market were sluggish and the average transaction price of natural gas in major markets fell sharply compared to the same period last year.